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Markets to open in green on Tuesday

Indian markets ended flat on Monday as gains in metals and energy stocks were capped by losses in financials and FMCG space. Today, the markets are likely to open in green amid mixed global cues. Some support will come with Finance Minister Nirmala Sitharaman’s statement that the fiscal measures taken by the government have resulted in positive growth of 0.4 per cent in the third quarter of the current financial year. The minister further said that the gradual unlocking of the economy has eased supply-side disruptions enabling inflation to decline from 7.6 per cent in October, 2020 to 4.1 per cent in January 2021, mainly on account of decline in food inflation. She added that the economy is estimated to contract by 8 per cent during 2020-21 due to the impact of the COVID-19 pandemic. However, there may be some cautiousness as the coronavirus cases in India jumped to 11,244,624 with 15,353 new infections reported across the country, according to Worldometer. The death toll, meanwhile, reached 157,966 with 76 fatalities in the last 24 hours. Coronavirus cases rise unabated across the globe with 117,737,718 infected by the deadly contagion. While 93,401,033 have recovered, 2,611,556 have died so far. The US remains the worst-hit country with 29,743,289 cases. Meanwhile, as per a report, the government is working on amendments to Banking Companies (Acquisition & Transfer) Act and Banking Regulation Act to facilitate the privatisation of public sector banks. Telecom stocks will be in limelight as the Telecom Department issued demand notes to Reliance Jio, Bharti Airtel, and Vodafone Idea asking them to make stipulated payments for the spectrum they bought in the just-concluded auctions. Aviation stocks will be in focus with ICRA’s report that India's domestic air traffic fell 37 per cent year-on-year to 78 lakh (7.8 million) passengers in February amid travel curbs and capacity restrictions due to the pandemic. There will be some reaction in banking sector stocks as Fitch Ratings said the impact of Covid-19 pandemic is likely to pose challenges to improving financial performance of Indian banks once asset-quality risks manifest in the financial year ending March 2022 (FY22).

The US markets ended mostly lower on Monday as slumps in several Big Tech companies offset gains in many other parts of the market. Asian markets are trading mixed on Tuesday after starting the week by struggling for gains in what some analysts have described as a fragile environment.

Back home, Indian equity benchmarks erased intraday gains to end Monday’s volatile session a marginally higher. Markets made optimistic start and stayed in green for most part of the day, as traders took encouragement as FICCI's overall Business Confidence Index has witnessed a decadal high of 74.2 in the current round on account of improvement in present conditions as well as expectations. The Index had stood at70.9 in the previous survey and 59 a year ago. It revealed recovery of demand conditions, improved capacity utilisation and a promising outlook on various operational parameters. The markets were also taking support with the finance ministry’s statement that the Indian economy is likely to do better than the projection of an 8 per cent shrinkage in the current fiscal as economic activity gathers pace with mild stiffening of pandemic curve and the rollout of vaccines. However, key indices trimmed most of their initial gains in late afternoon session, as some concern came with Chief Economic Advisor (CEA) Krishnamurthy Subramanian’s statement that the country’s financial sector has not really grown as fast as it should have and is still very, very small. For instance, he said, while India is the fifth largest economy in the world, the largest Indian financial institution - SBI - is ranked 55th in the world. Traders also got cautious, after the RBI data showed that India Inc's overseas direct investment fell by 31 per cent to $1.85 billion in February this year. Domestic companies made investments of $2.66 billion in their overseas subsidiaries and joint-ventures in the year-ago month, February 2020. Meanwhile. Prime Minister Narendra Modi said the production-linked incentive (PLI) scheme would lead to output worth $520 billion in India in the next five years, while industry asked for clarity on implementation across sectors. Finally, the BSE Sensex rose 35.75 points or 0.07% to 50,441.07, while the CNX Nifty was up by 18.10 points or 0.12% to 14,956.20.

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